Pennsylvania Rule of Disciplinary Enforcement 221 requires an attorney to maintain the attorney’s trust account at an eligible financial institution. It is the attorney’s responsibility to identify to the financial institution all accounts that are subject to Rule 221.
Rule 221 requires the eligible financial institution to report the occurrence of the presentment of any check or similar instrument, when such account contains insufficient funds to pay the instrument. The report must be provided to the Pennsylvania Lawyers Fund for Client Security within 5 banking days of the presentment of the instrument. The report must be filed with the Pennsylvania Lawyers Fund for Client Security even if the financial institution chooses to pay the item that has been presented against insufficient funds.
The Pennsylvania Lawyers Fund for Client Security does the initial inquiry relating to the report. The Fund will mail a letter to the attorney/law firm and request a written explanation, which explanation must be complete and supported by appropriate documentation. The documentation required will include, but may not be limited to:
- Client ledgers for all client funds involved in the explanation;
- A copy of the dated, receipted deposit slip for the deposit made to correct the shortfall in the account and an explanation as to the source of the funds which were deposited; and
- Copies of the three most recent bank statements for the account that is the subject of the report.
If the explanation is satisfactory, the file will be closed. There will be no disciplinary record regarding the negative balance.
If the explanation is not satisfactory, or should the attorney fail to provide all requested information and/or documentation, the matter will be referred to the appropriate Office of Disciplinary Counsel for possible further inquiry.
The policy and procedures regarding Rule 221 are more fully set forth in the Fund’s Rules and Regulations, Regulation 4.